Food Service - Hotel Restaurant Institutional

An Expert's View about Food and Beverage Services in Taiwan

Posted on: 29 Jun 2012

Despite the recent economic slowdown, Taiwan’s food service sector has enjoyed strong growth.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 6/25/2012 GAIN Report Number: TW12018 Taiwan Food Service - Hotel Restaurant Institutional Food Service Sector Enjoys Strong Growth Approved By: Jeffrey Hesse Prepared By: Cleo Fu Report Highlights: Despite the recent economic slowdown, Taiwan’s food service sector has enjoyed strong growth, expanding by nearly 13 percent to US$12.3 billion in 2011. The rise of Taiwan’s tourism market has also played a critical role in creating new opportunities. As further confirmation of the sector’s success, several food service companies filed for successful initial public offerings during the past year. Post: Taipei ATO SECTION I. MARKET SUMMARY A. Macro-economic Situation Taiwan has a dynamic market economy that has continued to expand despite global economic challenges. Although the economy slumped in 2008 and 2009, Taiwan saw a robust recovery in 2010 with GDP growing by 10.7 percent -- the highest growth rate in 28 years. Taiwan’s economy slowed in 2011 but still managed a respectable 4.04 percent expansion. The upward trend continued in the first months of 2012 due to high returns on Central Bank investments, the appreciation of Euro-denominated assets, and the appreciation of the U.S. dollar against other major currencies. According to Central Bank Statistics, Taiwan’s foreign exchange reserves rose from US$348.2 billion in December 2009 to US$385.55 billion in December 2011. Taiwan's reserves further increased to US$389.3 billion as of May 2012, making Taiwan the world's fourth-largest foreign exchange holder. Overall, Taiwan is the United States' tenth largest trading partner and fifth largest export market in Asia. Key Economic and Social Indicators 2009 2010 2011 GDP (Billion US$) 377.4 430.1 466.9 GDP (US$ / per capita) 16,359 18,588 20,139 PPP: US$ (International Monetary Fund est.) 31,840 35,595 37,720 Average Disposable Income (US$ / per Household) 26,857 28,106 N/A Food & Beverage Total Spending (%) 22.39 22.09 N/A Average Annual Exchange Rate (1US$= NT$) 32.03 30.37 30.29 Consumer Price Index -0.87 0.96 1.42 Unemployment Rate (%) 5.85 5.21 4.39 Economic Growth Rate (%) -1.81 10.72 4.04 Total Agri-Food Imports (billion US$) 10.0 12.8 14.8 Total Agri-Food Exports (billion US$) 3.3 3.6 4.0 Agri-Food Imports as a Share of Total Imports (%) 5.8 5.1 5.3 Source: Taiwan Director-General of Budget, Accounting, and Statistics (DGBAS); Council of Agriculture (COA) B. Agricultural Trade Although Taiwan is an economic powerhouse, domestic agricultural production is somewhat limited. As a result, Taiwan is increasingly reliant on imports of food and other agricultural products. The United States has long been the major supplier of Taiwan's agri-food imports, followed by emerging South American supplier Brazil, Australia, Thailand and New Zealand. In 2011, Taiwan imported nearly US$4 billion dollars of food and agricultural products (including edible fishery products) from the United States, accounting for about 30% of Taiwan's total agri-food imports. Of the U.S. total, over US$2 billion was comprised of bulk commodities, including corn, soybeans and wheat. Other major food imports include meat and poultry products, dairy, fresh fruits, alcohol and beverage. Taiwan Food and Agricultural Product Imports Calendar Year: 2011 Source: Global Trade Atlas (excludes fishery products) C. Taiwan Food Service Sector Overview and Trends "People in Taiwan love to eat out! Eating out is also very much a part of the food culture in Taiwan." That statement was included in the 40th Fiscal Term Interim Business Report of popular fast-food chain MOS Burger, but most Taiwan consumers and foodservice managers and investors would agree. According to Taiwan’s Ministry of Economic Affairs (MOEA), the economic output of Taiwan’s food service sector, excluding institutional food service, is estimated at US$12.3 billion in 2011, a 12.8 percent increase from the previous year. Stronger overall economic performance has helped drive up food service sector revenue, which is expected to continue to grow over the next decade. This increase can also be attributed to other several factors, including the rise in consumer income, smaller family size, increasing numbers of working women and the development of tourism. Source: Taiwan Ministry of Economic Affairs (MOEA) * Note: On a U.S. dollar basis, 2009 market value declined largely due to the high U.S. vs. Taiwan currency exchange rate that year. On a New Taiwan dollar basis, however, the 2009 market value remained at the 2008 level despite the economic downturn. Employment History of Married Women Aged 15-64 Unit: % Year Had a job before marriage Have a job currently 1990 72.2 46.9 2000 82.1 49.7 2003 80.8 50.5 2006 84.4 52.5 2010 83.8 54.5 Source: Taiwan Director-General of Budget, Accounting, and Statistics (DGBAS) Taiwan consumers enjoy a very diverse food environment. In addition to traditional Chinese food cuisines, Japanese BBQ (Yakiniku), hot pot (shabu shabu), Thai foods, western fast foods and several other ethnic varieties are seen all around the country. As food trends change swiftly, however, many of these cuisines do not stay popular for long, and only a few types of cuisines gradually become fully integrated into local food culture. Street food and snacks are also signature features of Taiwan's food culture. Night markets with hundreds of food options are common island-wide. Food stands in the night markets use a wide variety of food ingredients -- imported and locally produced. For example, French fries produced in the U.S. and Canadian Pacific Northwest are offered side by side with locally produced sweet potato (yam) fries in the deep-fried food stands (yan su ji). Discounted gift certificate and coupons sold online (such as Groupon and Gomaji) also helped boost restaurant exposure and sales over the past few years. In a recent survey (November 2011) conducted by EOLembrain (Taiwan), 65 percent of consumers responded that they have heard of (78 percent) and purchased (65 percent) products on Groupon. Many small-operation restaurants have become popular overnight due to their products' wide exposure on these websites. Another EOLembrain's consumer survey (2010) showed that around 25 percent of online shoppers purchased food products online. Online shopping continues to soar and is likely to create more opportunities and sales for the food industry, including hotel and restaurants, as online shopping websites' customer service continues to improve with greater efficiency, which has generated strong customer satisfaction. Taiwan Restaurant Sector Statistics (Unit: US$1,000) Number of Outlets Total Revenue (US$) Total 94,708 8,265,371 Restaurants 68,462 6,810,648 2008 Beverage stores 13,406 932,833 Food Vendors 11,839 332,938 Others 1,001 188,952 Total 98,932 7,869,567 Restaurants 72,050 6,411,640 2009 Beverage stores 13,864 904,847 Food Vendors 11,661 307,091 Others 1,357 245,989 Total 102,129 9,176,645 Restaurants 75,077 7,549,918 2010 Beverage stores 14,087 963,864 Food Vendors 11,429 319,247 Others 1,536 343,616 2011* Total 105,964 9,982,076 Restaurants 78,822 8,262,503 Beverage stores 14,328 1,003,171 Food Vendors 11,106 329,954 Others 1,708 376,544 Source: Taiwan Ministry of Finance; *ATO Taipei estimate. ** Note: On a U.S. dollar basis, 2009 market value declined largely due to the high U.S. vs. Taiwan currency exchange rate that year. On a New Taiwan dollar basis, however, the 2009 market value remained at the 2008 level despite the economic downturn. D. Internationalization It was not until the end of last century that Taiwan’s food service companies began to venture beyond the Taiwan border. Investment liberalization in China was the most crucial factor in encouraging Taiwan's hospitality industry to test the water in China. In recent years, following their success in the China market, several Taiwan food service operations expanded their territories to Southeast Asia or even Europe and North America. As market entry restrictions and other challenges decline relative to many high-tech product sectors, the globalization of Taiwan’s foodservice may expand further. E. Tourism on the rise Together with Taiwan’s high-tech sectors, tourism is regarded as one of the star industries by the Taiwanese government in terms of creating jobs and earning foreign exchange. The government has spent billions of dollars on the improvement of transportation between major cities and famous tourist spots, as well as other programs to maximize convenience for travelers, making travel within the island easier for both domestic and foreign tourists. The Government’s tourism policy is the savior of the foodservice sector to counter the population decline. As part of Taiwan government’s National Development Plan, the Ministry of Transportation and Communications (MOTC) launched the ―Double Tourist Arrivals Plan‖ in 2002. The goal was to double the number of international tourist arrivals, which would deliver obvious benefits in creating jobs and earning foreign exchange. According to statistics released by the MOTC, the number of foreign arrivals to Taiwan increased significantly from 2004 to 2011, more than doubling to over 6 million, including 3.6 million tourists. Cross-Strait air passenger traffic also surged by 23% to 7.16 million persons compared to 2010, reflecting larger numbers of tourists from China and increasing travel by Taiwan businessmen investing in the mainland. The explosive growth of direct charter flights across the strait generated major profits for Taiwan's airline companies and air-catering businesses, which had seen sluggish sales for several years due to the completion of Taiwan's high speed rail connecting the major cities on the island. MOTC statistics also show that in 2008 spending by foreign tourists exceeded the total tourism expenditures of domestic tourists. A Taiwan Tourism Bureau survey indicated that food and beverage costs accounted for 11% of foreign tourists' (non-business visitors) total expenditures in Taiwan, generating over US$1 billion in income for the local food service industry. Source: Ministry of Transportation and Communications, ROC F. Advantages and Challenges for U.S. Exporters Advantages Challenges Taiwan consumers maintain a generally U.S. exporters face low price competitors in areas positive perception of and consume many such as juice and vegetables. U.S. food and agricultural products. Consumers are strongly attracted by novelty High market fragmentation makes it hard for U.S. and fashion in food products and services. exporters to achieve scale and scope advantages in terms of volume. Taiwan is highly dependent on agricultural Taiwan is the United State's 6th largest market for imports from the United States, particularly agricultural exports, but is often overlooked by U.S. grain and oilseed products. suppliers eager to export directly to mainland China. Taiwan importers are familiar with and trust U.S. exporters are sometimes reluctant to change U.S. grading systems, e.g. beef grading product specifications to comply with Taiwan standards. requirements and market demand factors. Taiwan consumers are brand-conscious and Many U.S. companies are unwilling to provide low America is a leader in food brands that set volume, consolidated shipments of high-value trends. products to food service companies. Taiwan’s population is highly educated, well- Geographically, the U.S. is much farther from traveled and extremely aware of global Taiwan than many major competitors, and the lack foodservice brands. of direct air links by major American airlines reduces the profile of Taiwan to U.S. exporters. The popularity of American holidays and Taiwan’s emerging ―green‖ tendencies have a culture/lifestyle lead to promotional events potential to favor domestic foods by discouraging organized around these themes by Taiwan the consumption of imported foods and reducing the restaurants and hotels throughout the year. ―carbon footprint‖ associated with imported products. A wide variety of U.S. chains or American- Taiwan’s birth rate is among the lowest in the themed restaurants in Taiwan provide world, and population growth is expected to become opportunities to sample ―authentic‖ negative in coming years. American cuisine and beverages. Taiwan enjoys higher purchasing power and Taiwan consumers maintain a preference for ―fresh‖ a growing tourism sector. food products over ―frozen.‖ Increasing growth of fast food chains and casual dining restaurants is key to sector growth. SECTION II. ROAD MAP FOR MARKET ENTRY A. Entry Strategy Due to the limited size of their operations, the majority of Taiwan’s HRI companies do not import directly. Rather, they tend to place small but more frequent orders with local suppliers that are able to meet such needs. Consequently, U.S. companies should concentrate on establishing business relationships with reliable and efficient importers and distributors, who in turn, sell to HRI end users. Price is still the primary concern for most HRI buyers while quality and packaging come into play if the price is agreeable. Very few HRI businesses operate on exclusive contracts with suppliers. As a result, most chain and independent restaurants change suppliers frequently, particularly if there is a price difference. Small to medium size exporters should work with the appropriate U.S. State Regional Trade Group (SRTG) to take advantage of the SRTG’s resources for marketing and promotion support in major export markets. The four SRTGs are non-profit trade development organizations that help U.S. food producers, processors and exporters sell their products overseas. They are jointly funded by USDA's Foreign Agricultural Service (FAS), the individual state departments of agriculture and private industry. The SRTGs provide export assistance to companies located in their geographic region through a variety of export programs and integrated marketing services. To learn more services available from the SRTGs, find the SRTG for your geographic region in the list below and visit the website. Western U.S. Agricultural Trade Association (WUSATA) Southern U.S. Trade Association (SUSTA) Food Export-Midwest (previously named MIATCO) (Food Export) Food Export-Northeast (Previously named Food Export USA) (Food Export) B. Market Structure The majority of HRI companies in Taiwan purchase most of their food products from importers, distributors, wholesalers, regional wholesale markets, wet markets, and supermarkets/hypermarkets, depending on the type of food item. Imported fresh items such as produce, fish/seafood and beef, are usually purchased and delivered directly from importers or through distributors or wholesalers. Institutional users buy more products from local distributors or import directly. A recent trend is that retail outlets such as Costco are frequented by many small food service/HRI operators to buy items in quantity at the lowest possible cost, thereby avoiding the hassle of trying to source small volumes via traditional import channels. Food and beverage managers and executive chefs at international hotels are the key persons who decide which items are purchased. The purchasing department procures various food ingredients based on the list that F&B section provides. Hotels, especially those that employ foreign chefs or offer authentic foreign cuisines, and other high-end family style restaurants typically use more imported items from importers or wholesalers/distributors. Western and local fast food restaurant chains usually have their own distribution centers or they contract with an independent distribution center to purchase, partly process and deliver the daily needs to each outlet island-wide. Fast food chains also maintain their own R&D team or work closely with one or more contracted regional catering service(s) to develop and frequently renew menus to meet consumers’ demand. Medium-level family style chain restaurants generally maintain a centralized purchasing department and a centralized kitchen as well. The centralized kitchen prepares meals and delivers the foods to all outlets of the restaurant chain. Other smaller-scale drinking and eating establishments purchase the majority of their daily needs from wholesalers, regional wholesale markets or wet markets. Taiwan HRI Distribution Channel Flow Diagram U.S. Exporter Consolidator/Trading Company Importer/Distributor/Agent Wholesaler Wet Market Taiwan HRI Trade C. Sub-Sector Profiles 1. Hotels and Resorts Socializing in hotel restaurants has been a popular practice in Taiwan. As a result, hotel restaurants have become an important dollar earner for Taiwan’s international hotels, accounting for nearly 46 percent of total operating income (Source: Taiwan Tourism Bureau 2011 data). In 2011, in terms of F & B income generated by hotel restaurants, the ―Grand Formosa Regent Hotel Taipei‖ topped the list with US$47.6 million, closely followed by the ―Sheraton Taipei‖ (US$45.1 million), the ―Grand Hyatt Taipei‖ (US$32.8 million), and the ―Ambassador Hotel Taipei‖ (US$29.6 million). Taiwanese people often entertain their business counterparts, friends and relatives in restaurants, especially on special occasions such as weddings/engagements, birthdays, Mother’s Day, ―Honorary Banquets in Praise of Teachers‖ and Lunar year-end parties hosted by company management. Food served at these occasions tends to be either Western-style buffets or Chinese-style food banquets. In addition, holiday celebrations are becoming more and more commercialized, especially western holidays such as Christmas, Thanksgiving, Independence Day (American Week Food Promotions) and Valentine's Day. Taiwan’s hotel restaurants use these occasions to aggressively promote set menus, offering excellent opportunities to promote American foods and beverages. U.S. companies with products used principally in the HRI sector should consider how to take advantage of these promotional opportunities by developing recipes, special menus or merchandise to help draw in the different group. In addition to the general food service business, hotels in Taiwan have also focused in recent years on specific gift food packages for various festivals, such as moon cake gift packs for the Moon Festival, chocolate gift packs for Valentines’ Day and turkey hampers for Thanksgiving. The development of domestic courier services is also credited for the rapid growth of the gift-pack market. Resorts in Taiwan, classified by areas of focus, fall primarily into the categories of hot spring towns, scenic areas, cultural sites and amusements parks. With the completion of the freeway system connecting metropolitan Taipei and Taiwan’s east coast, many real estate developers have built or are building high end resorts in major hot spring towns and scenic spots in this area. As of February 2012, eleven resorts and spas with nearly 3,000 rooms were under construction in east coast cities. Most of the resorts manage the food venues themselves and purchase primarily through importers and distributors. New Resorts Under Construction on the East Coast of Taiwan Name Number of Estimated Date of Estimated Capital Rooms Completion (US$Mil) Spring Park Jiaoshi Villa R 84 8/31/2014 37 esort Shangrila Resort 146 8/31/2013 43 Ocean International Tourist Hote 99 12/31/2013 27 l Sheraton Yilan Resort 193 12/31/2015 59 Papago Resort 402 12/31/2016 40 Naruwan Beach Hotel 272 12/31/2016 79 Grand Green Island Resort 809 12/30/2016 165 Castle Hotel 146 12/31/2015 37 Green Garden Hotel and 218 12/31/2014 33 Spa Huang family hotel 172 12/01/2014 12 Hua Lien Hotel 260 12/29/2017 36 Source: Taiwan Tourism Bureau Major 4- & 5-star Hotels, Resorts, and Spas in Taiwan F & B Hote Sales Numb Purchasil/Resor We Locatiobsite 2011 er of ng t Name n (US$Mi Rooms Agent(s) l) Direct The Regent Importers Ta 47.6 569 Taipei ipei Distributo rs Importers Sheraton Ta tp:// 45.1 692 Taipei Distributoipei Hote htl rs Direct Grand Hyatt Importers Ta 32.8 865 Taipei ipei Distributo rs The Direct Amba Importers ssador 29.6 432 Taipei Hote Distributol rs Far Eastern Importers Plaza Hotel 27.0 420 Taipei Distributo (Taipei) rs The Importers Westin Ta 24.0 288 Taipei Distributoipei rs L Importers e Meridien Taipei Hote 23.0 160 Taipei Distributol rs The Importers Grand Hote 21.0 402 Taipei Distributol rs How Importers ard tp:// 18.2 606 Taipei Distributo Plaza Hote htl rs Importers W Taipei 16.3 405 Taipei Distributo rs The Direct Importers Sherwood 11.3 343 Taipei Hote Distributol Taipei rs Palais De Importers C Hotel 0.9 286 Taipei Distributo Ta h-tw/ 1 ipei rs Hote Importers l Royal Ta 7.5 202 Taipei Distributoipei rs The Importers Landis Ta 6.9 209 Taipei Distributoipei Hotel hinese-trad/ rs Importers Imperial Hote 5.9 288 Taipei Distributol Taipe http://i rs The Importers Fullon Hote 5.0 120 Taipei Distributol Taipe http://www.fullon-hi rs R Importers adium- Ka 4.1 90 Taipei Distributogaya rs Fullon Hotel Da Importers nshuei http://fishermen-wharf.fullon- 3.1 198 Taipei Distributo Fishermen's W rs harf Hotel Landis Importers C http://yangmingshan.landishotelsresohina .9 50 Taipei Distributo Ya 0 ngmingsh rs an Importers Hotel Eclat n/a 60 Taipei Distributo rs Fulong Importers Bellevue n/a 54 Taipei Distributo Hotel rs Spring Park Importers Urai Spa & n/a 23 Taipei Distributo Resort rs The Amba Importers ssador Hote 12.0 257 Hsinchu Distributol Hsinc rs hu Sheraton Importers Hsinchu 12.0 386 Hsinchu Distributo Hotel rs Hote Importers l Royal Hsinc 4.4 208 Hsinchu Distributohu rs Evergreen Taichun Direct L 10.1 354 aurel Hotel http://www.evergreen-hot g Importers (Taichung) Distributo rs The http://www.splendor- Ta Importers ichun Splendor .5 222 Distributo Hote 9 g l rs Howard rters Prince Hotel http://www.howa Ta Impo ichun 5.6 155 Distributo Ta g ichung rs Hote Importers l One Ta Taichun n/a 202 Distributo ichung g rs W Importers indsor un Hote http://www.windsortaiwa Taich n/a 149 Distributo l g rs Tayih Importers Landis 10.9 315 Tainan Distributo Tainan rs Shangri-La's Importers Far Eastern 9.4 336 Tainan Distributo Plaza Hotel, Ta rs inan Grand Hi- Ka Importers ohsiu L 40 Distributoai Hot 26.9 5el ng rs The Ka Importers ohsiu Splendor, 14.8 592 Distributo Ka ng ohsiung rs Crowne Direct Plaza Ka Kaohsiu Importers ohsiung 13.1 656 E-DA ng Distributo W rs orld The Direct Ambassador iu Importers Hote http://www Kaohs 12.7 453 l ng Distributo Kaohsiung rs Grand Hotel Ka Importers ohsiu Ka 12.1 107 Distributoohsiung ng rs Howard Importers Plaza Hotel Kaohsiu 7.8 328 Distributo Ka ng ohsiung rs Fullon Hotel Ka Importers ohsiu Ka 0.8 250 Distributoohsiung ng rs Hote Importers l Royal C 7.3 198 Yi-Lan Distributohiao-Hsi http://www.hrjhote rs Direct Silks Place Importers Yilan 7.0 193 Yi-lan Distributo rs Eve Direct rgreen R http://www.evergreen- Importers esort Hotel 6.8 231 Yi-lan Distributo (Jiaosi) rs Novotel Ta Direct ipei Ta Importers oyuan 4.7 361 Taoyuan Distributo International Airpo rs rt The Lalu Importers Sun Moon 3.9 96 Nanto Distributo Lake rs Importers Fleur De C 6.8 211 Nanto Distributohine Hotel rs Caesar Park Importers Hotel 4.9 254 Pingtung Distributo Kenting rs Howard B Importers each R 4.5 418 Pingtung Distributoesort Ke rs nting Formosan Naruwan Importers Hotel & 3.3 276 Taitung Distributo Resort rs Taitung Hotel Royal Importers C http://www.hotel-royal-hihpen 183 Taitung Distributo 2.8 Spa rs Farglory Importers Hotel, 5.4 381 Hualian Distributo Hualien rs Parkview Importers Hote 5.4 343 Hualian Distributol rs Hualian Importers C 4.1 221 Hualian hateau de Distributo Chine Hotel rs Silks Place Importers Hotel, 2.1 160 Hualian Distributo Taroko rs Promisedlan Importers d Resort & n/a 240 Hualian Distributo Lagoon rs Source: ATO Survey; Taiwan Tourism Bureau, Ministry of Transportation & Communications 2. Restaurants The restaurant sub-sector dominates the local food service market in Taiwan with 82.3% of the market (2010). Based on Taiwan Ministry of Finance data, the total revenue for the restaurant sub-sector was estimated at nearly US$8 billion in 2010, while beverage stores generated US$1 billion revenue for a 10.5% market share, and snack and street vendors sector gained US$0.3 billion with a 3.5% share. Family Style/Casual Dining Restaurants The majority of restaurants in Taiwan are casual dining places. As most of the restaurants in this category are small businesses, they purchase materials mainly from wholesalers and wet market. Only larger chains/franchises tend to buy products from importers or import directly. Breakfast shops There are over 10,000 breakfast shops in Taiwan. Most of them provide western foods such as hamburger, sandwich, milk tea and coffee. These breakfast chains and franchises are more like miniatures of western fast food restaurants, but they sell foods at lower prices and with more variety. As they provide fast service and cheaper foods, they are the first choice for the majority of consumers buying breakfast on a limited budget. In recent years, the breakfast shops have faced strong competition from Taiwan's over 9,000 24-hour conveniences stores, most of which feature healthier and fresher food selections. Western-style Fast Food McDonald's, which opened its first outlet in 1984, remains the largest fast food chain in Taiwan with 361 stores island-wide. Competition among fast-food restaurants is becoming more intense since Japan- based MOS Burger started its more aggressive expansion in foreign markets. Among MOS burger's 265 outlets outside of Japan, as of September 2011, 202 outlets were in Taiwan. MOS Burger's Taiwan franchisee, An Shin Food Services Inc., announced that the company’s goal is to open as many as 250 outlets in Taiwan by the end of 2013 and 350 outlets within the next 3-5 years. Facing growing competition, McDonald’s also announced plans to increase the franchising ratio to 30 percent as it increases the number of outlets to 500, while Kentucky Fried Chicken aims to open 30-50 new restaurants by 2014. New products, such as coffee latte, bagels and rice burgers, were introduced into the Taiwan market, leading to even greater diversity in consumer choices and expectations. In addition, promotions offered by fast food establishments, including price-off, giveaways, and volume discounts, are increasingly common. Chinese-style Fast Food As the entry barrier for Chinese-style fast food chains and franchisers is low, they have sprung up all over Taiwan in the past decade. They have gained popularity with all ages of consumers, specializing in dumplings, meat ball and sour-spicy soups, beef noodles and Chinese stews. Greater competition among these fast food chains, combined with new competition from convenience store that are expanding into prepared meal service, have led to increased pressure on margins in this segment. Low labor costs and the fact that many chains have the ability to provide standardized products, have made the outlet numbers of these chains grow faster than Western fast food restaurants in recent years, which was contrary to industry experts’ expectations. Though the expansion of Chinese-style fast food restaurants has slowed, they are still the major competitors for Western-style fast food chains. Department Store Food Courts & Restaurants Typically, major department stores in Taiwan have several sit-down restaurants, as well as a full or at least part of a floor devoted to a food court. Revenues from restaurants and food courts represent around 30% of the total department store revenue. Shin Kong Mitsukoshi, Far Eastern Department Store, and Sogo Department Store (also managed by Far Eastern) are the major players. Coffee Shop Chains Coffee consumption in Taiwan has seen rapid growth in recent years. The market size is currently estimated at over US$1 billion. Coffee import volume, including raw and roasted coffee, tripled in the past decade, increasing from 6,844 metric tons (MT) in 2001 to 17,685 MT in 2011. Current annual per capita coffee consumption in Taiwan is 100-120 cups according to industry estimates. The market is still relatively underdeveloped compared to consumption in western countries (300-400 cups) or even in the neighboring countries such as Japan and Korea (150-200 cups), so there is room for further expansion. Competition in the Taiwan coffee market segment intensified after chain convenience stores entered the game by offering freshly-brewed coffee. Younger generations, especially white-collar workers, are the major consumers of freshly brewed coffee. Drinking coffee in a coffee shop symbolizes fashion, taste, and a stylish lifestyle, and it has become a social stimulant for conversation, logging onto a social web, or business meetings. Hence, more and more younger people are seen drinking coffee in a variety of circumstances. Most coffee shops also provide sandwiches, salads, cakes and pastries prepared by catering companies or other food processors. Some domestic and Japanese style coffee shops also offer freshly made sandwiches and hot meals, which are shipped frozen from their food processors for reheating at the outlets. Many coffee chains import coffee beans directly but purchase other food materials from importers, wholesalers, and distributors. The significant growth of the coffee shope segment in recent years in Taiwan has created a niche market for imported candy/chocolate and cookie products. Many coffee shops, such as Starbucks, Dante, 85°C Coffee, Is Coffee and Barista, not only sell coffee and light meals, but also sell candy/chocolate/cookie products with small and attractive packaging. Latte (espresso with steamed milk) and Americano (adding water to espresso) are the most popular orders in coffee shops. The growing demand for cafe latte has also stimulated demand for milk (fresh or powdered). Taiwan Coffee Import Statistics (Raw and Roasted) Year 2006 - 2011 Year R Partner/ ank C Unit 2010/2011 ountry 2006 2007 2008 2009 2010 2011 % Δ World T 10,772 13,872 11,600 13,395 17,887 17,685 -1.13 1 Indonesia T 4,009 5,285 2,803 5,189 5,694 5,092 - 10.58 2 Brazil T 1,304 2,319 1,720 2,183 3,265 3,654 11.89 3 Guatemala T 826 1,412 1,646 690 1,918 1,638 - 14.59 4 Vietnam T 1,308 1,580 1,186 1,076 1,760 1,644 - 6.60 United 5 T 535 687 824 875 1,024 1,265 23.51 States 6 Colombia T 701 525 683 641 739 1,020 38.02 7 Honduras T 376 309 375 497 532 363 - 31.73 Source: Global Trade Atlas Soft Drink Bars Soft drink bars are seen on every corner of Taiwan's streets. This type of soft drink shop developed rapidly after "bubble tea" gained popularity in the 1980s. "Pearl Milk Tea", which contains small chewy balls made of tapioca starch, is the signature drink and the most popular order in many of the soft drink bars. In addition to Pearl Milk Tea, there are many other variants of soft drinks. Most of them are tea-or fruit- based ice-blended and smoothie versions. Syrups, pulp, black and green tea, instant coffee, concentrated fruit juice, creamer, and milk, which are purchased mostly from importers and distributors, are the basic materials used in these shops. Most of the bars only provide to-go service, and the shops might be as small as 100 square feet. Soft drink stands are often seen in the night markets or near schools. Major Restaurant Company Profiles a. Restaurants Sales Outlet Name, type, C Purchasing ompany Name ($Mil) / Number of Outlet Location Agents 2011 (Taiwan only) Noble Family Co., n/a Noble Family Steakhouse, National Direct Ltd (steakhouse) (135) Importers Bullfight Group Bullfight (steakhouse, Ta Na Direct tional iwa n/a n Inc. family style) (19) Importers Wang Steak (steakhouse) Na Direct tional (13) Importers Ta Direct sty (family style) (33) National Importers Tokiya (family style) (28) Na Direct tional Importers Yuanshao (Japanese ect BBQ) Na Dir tional (18) Importers Gig Direct uo (Hot Pot) (24) National Importers W Ikki (Japanese family owPrime Corp. 213.6 Na Direct tional style) (6) Importers Chamonix (Teppenyaki) Na Direct tional (10) Importers Pintian Farm (family Na Direct tional style) (16) Importers ect 12 Sabu (hot pot) (18) Na Dirtional Importers Su Food (organic/healthy Na Direct tional food) (8) Importers Famonn Coffee (coffee Taipei (1st store Importers shop) (2) opened in 2011) Distributors Skylark (family style) Nor Importers th/Central (13) Distributors Skylark Co. n/a Gr Importers azie (Italian) (18) Distributors Shin Yeh (Taiwanese / Shin Yeh Co., Ltd. n/a Ta Importers ipei family style) (13) Distributors Ding Ding Tai Feng (Chinese) Importers Tai Fung n/a North/Central (7) Distributors Director T.G. T.G.I. Friday's (American I. Friday's n/a National Importers style) (17) Distributors Swensen's (American National style) (6) Ruth's Chris (steakhouse) National (3) Director Hasmore Ltd. Co. n/a Macaroni Grill (American Ta Importers ipei style) (1) Distributors Chili's (American style) National (4) Trader Vic's Taipei (western/Asian) (1) Pâtisserie Sadaharu Aoki Taipei Paris (bakery/cafe) (2) Royal Host R Importers oyal Host (western/family style) National n/a Distributors (14) McDonald's R McD Direct onald's (fast food) estaurants n/a National Importers (361) (Taiwan) Co., Ltd. Distributors B Direct urger King (fast food) National Importers Gr (41) eat Wall Distributors Ente n/a rprise Co., Ltd. Saboten Japanese Direct Restaurant (Japanese National Importers family style) (16) Distributors Direct Kentucy Fried Chicken National Importers Jardin Food n/a (fast food) (129) Distributors Services (Taiwan) C Direct o., Ltd. n/a Pizza Hut (Pizza) (159) National Importers Distributors An-Shin Food MOS Direct Burger (fast food) 131.5 National Importers Service Co., Ltd. (219) Distributors Eight Way Food 8 Way Dumplings C n/a a Importers tional o., Ltd. (Chinese N/fast food) (450) Distributors L Oversea Dragon (Chinese ong Mao Co., Ltd. Na Importers tional n/a /fast food) (190) Distributors Mer Direct curies Food Chain National Importers Mer (Chinese/fast food) (151) curies & Distributors Assoc n/a iates, Ltd. Na Direct poli Pizza (fast National Importers food/pizza) (89) Distributors Pizzavest Co., Ltd. Dominos Direct Pizza (pizza) n/a National Importers (Regent Group) (140) Distributors Sushi Express Importers n/a National (Japanese/Sushi) (150) Distributors Sushi Take-out (Japanese n/a Nor Importers th Sushi Express CO., /Sushi) (25) Distributors Ltd. Dingshi 8 (family style) n/a Nor Importers th (24) Distributors Sushi Express Hot Pot n/a Nor Importers th/Central (family style/hot pot) (7) Distributors Direct Yoshino Yoshinoya (Japanese beef ya n/a National Importers rice/fast food) (53) Distributors W Direct ang Zhang Fa Gaibom (Chinese) (112) National Importers Industry Ltd. n/a Distributors Ji-Shang Industry porters C n/a Wu Tao (Chinese) (232) Na Im tional o., Ltd. Distributors Mo Mo P Direct aradise National Importers (Japanese)(10) HuMa Distributors x Taiwan Co, L n/a td. B rs ellini Pasta Pasta (5) Nor Importeth Distributors Be Importers llini Caffe (Italian) (1) North Distributors Hw YaYan Yakiniku Direct a Da Industry C n/a Restaurant (Japanese) National Importers o., Ltd. (39) Distributors Top of Form Importers Tonka n/a Tonkatsu (Japanese) (32) National tsu Co., Ltd. Distributors Cashcity C Direct ashcity Shabu Shabu Foodservice Co., n/a National Importers L (Japanese) (138) td. Distributors Direct Home Steak Shuh Sen Co., L Mytd. n/a National Importers (Steakhouse) (59) Distributors Tha Direct i Town Cuisine (Thai National Importers Food) (25) Distributors TTFB Direct Company L 22.6 Very Thai (Thai Food) (5) North/South Importers imited Distributors Direct 1010 Shang (Chinese) (6) National Importers Distributors Subwa Direct y Taiwan De (118) National Importers velopment n/a Subway (Western) Distributors Source: ATO Survey b. Breakfast shop chains and franchises Sales Outlet Name, type, Company Name ($Mil) / Number of Outlet L Purchasing ocation Agents 2011 (Taiwan only) Hong Direct Ya International Ente n/a Hong Ya Burger (800) National Importers rprise Co. Ltd. Distributors Direct Sun Spark Group n/a Laya Burger (604) National Importers Distributors Direct Super-Mill Group Co. Ltd n/a My Warm Day (1509) National Importers Distributors Direct Ju-Lin Food Enterprise C n/a Ju-Lin Mei-Er-Mei (999) National Importers o., Ltd. Distributors Good Mor Direct ning Beauty Good Morning Beauty Castle Enterprise Co., Ltd. n/a tional Importers C Naastle (1,000) Distributors C Direct hiao Pei International C n/a Eastern Beauty (950) National Importers o., Ltd. Distributors Mei & Direct Mei Foodservice C n/a Mei & Mei (2,915) National Importers hain Group Distributors Source: ATO Survey c. Coffee, Beverage & Dessert (non-bakery) Shops Sales Outlet Name, type, Company Name ($Mil) / Number of Outlet L Purchasing ocation Agents 2011 (Taiwan only) Gourmet Maste Direct r Co., 263.8 L 85°C (coffee) (337) National Importers td. (2010) Distributors Uni-President Direct Starbucks (coffee) Starbucks Coffee n/a National Importers C (260) ompany Distributors Da Direct nte Coffee and te (coffee) (127) National Importers Foods Co., L n/a Dantd. Distributors Direct ECoffee Co., Ltd. n/a ecoffee (coffee) (119) National Importers Distributors Mr. Brow Direct n Coffee Mr. Brown Coffee n/a North Importers Shop (coffee) (58) Distributors Ding Direct -hao Acme Co., L n/a IS (coffee) (21) North/Central Importers td. Distributors Direct Kohikan Corpor ate Kohikan (coffee) (17) North/Central Importers n/a Distributors Direct B Barista Coffee (coffee) arista n/a National Importers (28) Distributors Direct Ikari Coffee Co., Ltd. n/a Ikari (coffee) (71) North/Central/East Importers Distributors R Direct ose Republic Rose House (tea and Importers International Co., Ltd. n/a National coffee) (24) Distributors Te - Direct nRen Group (Te Cha For Tea (Tea) (76-n R Tea Restaurant:11; Tea National Importers en Co. n/a, Ltd.) Bar: 65) Distributors Te Direct a Professional Intl Tea Professional (Tea C n/a hian Group B National Importers ar) (176) Distributors C Direct huan Yi Tung Ching Shin Fu Chuan B National Importers usiness Co. L n/a td. (Tea Bar) (1,070) Distributors Direct Chatime Co., LTD. ChaTime (Tea Bar) n/a National Importers (550) Distributors COMEBUY Direct COMEBUY (Tea Bar) ational Importers Interma n/a Ntional Co.,Ltd (95) Distributors Lien Fa International Direct Sharetea (Tea Bar) Foodservice n/a National Importers Enterprise Co., L (189) td. Distributors Direct Ding Tea Co., L Ding Tea (Tea Bar) td. National Importers n/a (118) Distributors Direct Presotea (Tea Bar) Presotea Co., Ltd. n/a National Importers (149) Distributors Source: ATO Survey; company websites; Taiwan Chain and Franchise Annual Report 3. Institutional According to the Ministry of Finance's data, Taiwan’s institutional sector accounted for only 3.8 percent of total food service sector revenue in 2011. With air traffic between Taiwan and mainland China increasing significantly, the air catering sector's future is promising. School, hospital, and military catering is stable but might face more challenges in the future due to decreasing student numbers resulting from low birth rates and Taiwan's policy of drawing down its military force. Total Student Enrollment Statistics in Taiwan Source: Department of Education, ROC Air Catering Currently, Evergreen Sky Catering Corporation, China Pacific Catering Service, and TransAsia Airway Corporation dominate the local air catering market. Given strong competition within this sector, these companies are aggressively expanding their catering business to include convenience stores, restaurants, coffee shops, schools, and hospitals. These airline flight kitchens purchase food ingredients from local importers, manufacturers and wholesalers, but these companies also import directly. The industry is widely expected to record continued growth over the next few years. Schools There are 2,659 elementary and 742 junior high schools, both public and private, in Taiwan. According to the Ministry of Education, all kindergartens, elementary and junior high schools in Taiwan operate lunch meal programs. Over 90 percent of students eat meals provided by school kitchens or school lunch program contractors, which means that over 2.27 million students in Taiwan eat at school. The budget for a meal is about NT$45 (approximately US$1.5) per child. In terms of animal proteins, due mainly to cost concerns, beef is not used as much as pork and chicken. Leafy vegetables and fresh fruits are preferred. Given the small budget allocated for school meals, the use of U.S. products in this sector is limited, including frozen chicken and pork, fresh fruits and root vegetables. Hospitals As of 2011, there were 513 hospitals (including branches) registered in Taiwan with over one hundred thousand beds. Major hospitals are located in big cities in the west coast like Taipei, Kaohsiung, and Taichung. Most of the major hospitals have restaurants for visitors and separate restaurants or cafeterias for employees and patients. Restaurants for visitors are normally operated by contractors, while meals for employees and patients are typically planned by dietitians and prepared by hospital kitchens. Some small-scale hospitals outsource their food service business to catering companies. Since most hospitals run on a tight budget for food, U.S.-sourced food products are rarely specified. However, some niche opportunities exist, with pureed foods for dietary needs of the elderly, frozen items like sheet cakes for labor saving dessert items, and fresh low-cost fruits for patients. Military Taiwan has had mandatory military service for all males since 1949. Currently, the total number of soldiers in Taiwan is around 275,000 with males between the ages of 20-35 subject to 12-month mandatory military service. The Ministry of Defense plans to decrease the number of soldier to 215,500 by 2013. The number of soldiers will continue to decline after 2014 when Taiwan starts to recruit for an all-volunteer professional force. Each military base or unit manages most of its food purchases on a daily basis and buys fresh products from wholesalers or wet markets. They are usually required to support locally produced products except when local products are in short supply. SECTION III. COMPETITION In 2011, Taiwan imported nearly US$11.35 billion of food and agricultural products (not including seafood) from many different sources, of which US$3.87 billion (34%) was imported from the United States. The United States was the number one agricultural supplier to Taiwan, followed by Brazil, Australia and Thailand. Brazil is the United State's largest competitor in terms of soybean and corn. Australia was the largest supplier of beef while Thailand was Taiwan's largest supplier for starches and sugar/sucrose products. New Zealand ranked as the top supplier of dairy products, mutton and kiwi. While maintaining its position as a substantial supplier of imported bulk commodities such as corn (63.8%), soybeans (55.8%), and wheat (79%), the United States also supplied 89% of imported poultry products, 96% of almonds and 94% of walnuts. The United States is also the top supplier of imported vegetable and fresh fruits: apples (38% or US$54 million), cherries (56% or US$45 million), fresh and processed potato products (78% or US$40million), peaches (80% or US$30million) and fresh and dried grapes (56% or US$23million). Taiwan Agricultural Products Import Statistics Product Total Major Strengths of Key Advantages and Category Import Supply Supply Countries Disadvantages of Local Value Sources and Suppliers 2011 Market (US Share $Mil) Total Food and 11,352.7 1. USA – South American Taiwan's food self- Agricultural 34.0% countries have become sufficiency rate is low at Imports 2. Brazil - major suppliers of bulk 31.7% (2010, COA data) 9.6% commodities, wine, and relies heavily on 3. Australia - dairy products, and imports to meet 7.8% fresh fruits. domestic demand. 4. Thailand - 6.2% 5. N. Zealand -5.0% 6. China – 4.0% 7. Malaysia - 3.3% 8. Japan - 2.9% 9. Indonesia - 2.7% 10. Vietnam - 2.5 Total Fish and 729.6 1. China - China supplies shrimp, Taiwan produces more Seafood 15% mollusk, and cuttlefish. seafood products than it Products 2. Norway - Norway is the major needs and only imports Imports 10% supplier of salmon and those products not 3. Vietnam - trout. U.S. is a major available in the region. 8.4% supplier of fresh and 4. Thailand - chilled/frozen lobsters. 6.6% 5. USA – 4.0% Bulk Commodity Corn 1,385.3 1. USA - USA is the leading Taiwan relies heavily on 63.8% supplier of corn, but corn imports. 2. Brazil - Brazil has been an 24.1% aggressive supplier 3. S. Africa - since 2009. 5.0% 4. Argentina - 3.7% 5. India - 2.6% Soybean 1,310.3 1. USA - USA is the leading Taiwan relies heavily on 55.8% soybean supplier, but soybean imports to meet 2. Brazil – Brazil has been more both feed and food 41.0% aggressive in recent needs. 3. Paraguay - years. 2.0% Wheat 587.8 1. USA – USA is the major Taiwan has no 79.0% supplier of wheat, significant wheat 2. Australia - followed by Australia. production. 18.7% Meat & Poultry Beef 546,482 1. Australia - Australia dominates Taiwan's beef 38.7% market for cheaper production only 2. USA - beef cuts while the accounts for 5% of total 35.4% USA is traditionally beef consumed on the 3. N. Zealand the largest chilled beef island. - 20.6% supplier. Pork 103,580 1. Canada - Imports have occurred Local pork dominates 41.6% only in response to the market. 2. USA - occasional short 29.5% supplies and high local 3. Denmark - pork prices. 11.5% 4. Netherlands - 9.9% 5. Hungary - 5.2% Poultry 143,342 1. USA - Taiwan consumer's Local chicken dominates 88.9% preference for dark the market. 2. Canada - meat provides 10.9% opportunities for western countries. USA products are generally price competitive. Fish & Seafood Fish fillets and 79,502 1. India - Taiwan imports frozen Taiwan produces more meat, including 33.0% fish fillets (esp. cod seafood products than it surimi 2. China - and pollack) and surimi needs and only imports 19.0% for further processing. those not available in the 3. Vietnam - region. 17.0% 4. USA - 12.9% Rock Lobsters 14,807 1. USA - USA and Australia are Lobsters are not often and Other Sea 34.3% the key suppliers of seen along Taiwan's Crawfish, 2. Australia - frozen lobsters. coastlines. Frozen 31.2% 3. Cuba - 20.7% Lobsters, 4,921 1. Canada - Canada and USA are Lobsters are not often Fresh/Chilled 59.2% the key suppliers of seen along Taiwan's 2. USA - fresh and chilled coastlines. 40.3% lobsters. Oysters 4,962 1. S. Korea - Most imported oysters Local oyster products 52.4% are sold to buffet meet most of Taiwan's 2. USA - restaurants. demands. 26.6% 3. France - 10.0% Dairy Products Cheese 109,999 1. N. Zealand Southern hemisphere Local production is - 29.2% countries dominate the limited. 2. USA - imported cheese 21.1% market, but USA is 3. Australia – becoming more 21.0% competitive. 4. Argentina - 10.6% Whey 15,904 1. USA - USA is the leading Local production is 44.4% supplier of whey limited. 2. France - products. 19.3% 3. Poland - 4.6% 4. N. Zealand - 4.6% Butter 66,085 1. N. Zealand New Zealand leads Local production is - 61.6% with butter and several limited. 2. Australia - other dairy products. 10.2% France supplies high- 3. France - end products. 10.0% 4. Argentina - 4.8% 5. USA - 4.3% Fruits Apples, Fresh 145,128 1. USA - USA leads with several Taiwan is a significant 37.6% fresh fruits that have producer of fresh 2. Chile - limited local tropical fruits, and local 27.1% production, including fruit production is very 3. Japan - apples. high quality. Taiwan 18.9% only imports fruits 4. N Zealand Chilean and New typically not produced - 12.5% Zealand apples gain locally. seasonal advantage. Cherries, Fresh 81,126 1. USA - USA provides high There is no local 56.3% quality products. production. 2. Chile - 22.3% Southern hemisphere 3. Canada - countries gain seasonal 9.4% advantages. 4. N. Zealand - 9.3% Peaches, Fresh 37,914 1. USA- USA products are in Local products meet 80.2% good quality and price about half of local 2. Chile - competitive. demand. 16.0% Table Grape, 23,975 1. USA - USA supply good Local farmers produce Fresh 47.6% quality fresh table different grape varieties 2. Chile - grape. - typically sweeter. 32.8% 3. South Chile and South Africa Africa - 7.7% supply price competitive products. Plum, Fresh 9,660 1. USA - USA is the leading Local products are 75.7% supplier of plums. different varieties. 2. Chile - 24.2% Oranges, Fresh 5,159 1. USA - USA is the dominant Local products are 85.5% supplier of imported different varieties. 2. South fresh oranges. Africa - 6.9% 3. Australia - 6.7% Fresh Vegetable Broccoli and 9,460 1. USA - USA is the major Local products dominate cauliflower, 94.4% supplier of imported the market. fresh 2. Vietnam - broccoli. 5.04% Onions and 10,082 1. USA - USA is the major Local production fulfills shallots, fresh 79.79% supplier of imported around 60% of local 2. Vietnam - onions. demand. 10.3% 3. Spain - 4.0% 4. Thailand - 2.0% Lettuce, fresh 4,489 1. USA - USA supplies good Local products are 98.5% quality products with different varieties and competitive prices. generally of lower quality. Potatoes, fresh 3,612 1. USA - USA is the major Local products dominate 93.9% supplier of imported the market. 2. Australia - potato products, 6.1% providing good quality products with competitive pricing. Alcohol and Other Beverages Wine 123,913 1. France - France dominates the Local companies are not 55.9% market, but new world able to produce good 2. USA - countries are gaining quality wine. 8.7% traction due to 3. Chile - competitive pricing. 7.5% U.S. is the fifth largest 4. Australia - supplier by volume. 7.4% 5. Italy - 7.1% 6. Spain - 5.1% 7 Argentina - 2.3% Beer 151,858 1. The Netherlands and Local beer brands are Netherlands - China are aggressive most popular. 65.9% suppliers with many 2. China - promotions in 14.5% restaurants and bars. 3. USA - 6.9% 4. Japan - 4.9% Mixtures of 2,320 1. USA - USA is the major Local products dominate fruit and/or 61.3% supplier of imported the market. vegetable 2. S. Africa - fruit and vegetable juices 18.7% juice. 3. Switzerland - 7.6% Orange Juice 10,144 1. Israel - Israel and Brazil Local oranges are of 34.0% supply high quality different species. Orange 2. Brazil - concentrated orange juice derived from 32.6% juice. locally produced oranges 3. USA - is popular and usually 20.2% sold in wet markets or 4. by street vendors. Netherlands - 9.1% Grape Juice 11,255 1. Spain - Spain and Italy There is little local 52.8% dominate the market production available. 2. Italy - and supply price 24.2% competitive products. 3. USA - 11.0% Other products Coffee, 26,368 1. USA - USA supplies over half There is little local roasted, not 55.8% of roasted coffee while production available. decaf 2. Italy - Indonesia, Brazil and 13.8% other tropical countries 3. Malaysia - supply most of the 6.8% non-roasted coffee 4. beans. Switzerland - 5.9% Mixes and 18,401 1. USA - USA dominates the Taiwan imports most of Dough 49.6% mixes and dough its bakery ingredients. 2. Thailand - market. 12.7% 3. Japan - 11.5% 4. Italy - 5.8% 5. South Korea - 5.5% Sauces and 71,205 1. Japan - Taiwan consumers Local products dominate Preps 56.1% tend to prefer the the market. 2. USA - flavors of Japanese 13.0% sauces and condiments. 3. China - 8.0% 4. Hong Kong - 4.7% Almonds, 25,136 1. USA - USA is the dominant There is no local shelled 96.4% supplier of tree nuts. production available. 2. China - 3.6% Walnuts, 17,273 1. USA - USA is the dominant There is no local shelled 93.6% supplier of tree nuts. production on a 2. China - commercial level. 5.1% Source: ATO survey; Council of Agriculture; Global Trade Atlas SECTION IV. BEST PRODUCT PROSPECTS Category A: Products Present in the Market That Have Good Sales Potential Product 2011 2011 5-Yr. Import Key Constraints Market Category Market Imports Avg. Tariff Over Market Attractiveness size (US$Mil) Annual Rate Development for USA Import Growth Beef and 138,177 $546 14.35% Beef: Lack of import U.S. industry is beef MT NT$10 MRL for able to supply variety (carcass per ractopamine has large volumes of meat weight kilogram stymied imports ―Asian cuts‖ at equiv.) of U.S. beef. prices Beef Primary competitive with variety competitors are New Zealand and meat: New Zealand / Australia. 15% Australia with Quality of U.S. perceived chilled beef is acceptable recognized by quality at lower consumers. price. Cheese n/a $110 18.88% 5% New Zealand U.S. market share (29%) and is increasing, Australia (21%) reflecting dominate the growing market. Use in acceptance of home cooking U.S. cheese. not yet popular. Fish and $2,239 $730 22.7% NT$5.36 With a bias in Most U.S. Seafood to favor of fresh product Products NT$225 fish and consumed in per kg; or Southeast Asia- restaurants rather 9% to variety than purchased 50% crustaceans, U.S. for home use. exporters will HRI venues with need to work strong Western hard to gain orientation and market share. up-market positioning offer best opportunities for U.S. exporters. Fresh n/a $399 n/a Varies by There is growing Effective Fruit type competition from marketing new suppliers / programs varieties, emphasizing domestic and reliable quality, foreign, competitive especially pricing, and premium fruit recognized brands from Japan and have improved Korea. market share for U.S. fruit. Pork 922,688 $104 57.6% 12.5 to Consumption is High quality U.S. MT 40% relatively stable pork has gained (carcass and local acceptance in weight producers supply restaurants. equiv.) over 90% of There are good market. Greater opportunities for imports occur pork for only in response processing. to occasional short supplies and high local pork prices. The ractopamine MRL issue has disrupted the market for U.S. pork. Poultry n/a $143 n/a 20% Import quotas on U.S. enjoys 89% Meat poultry meat import market were eliminated share and is one in 2005, but of only six special safe countries certified guard (SSG) to export poultry raises the tariff meat to Taiwan. to about 26%. Tree Nuts n/a $92 n/a Varies Cashews from U.S. dominates by Asia have shifted market for type some market almonds, pecans, share from U.S. and walnuts. tree nuts. Almonds and Competition to pecans have great U.S. pistachios potential growth, comes from but baking Middle East and industry needs to Australia. learn how to use pecans in products. Whey n/a $16 7.3% 4 to 5% U.S. currently U.S. whey leading supplier benefits from of whey. competitive pricing and successful promotion efforts into food service and processed food channels by U.S. exporters and the U.S. Dairy Export Council. Wine n/a $124 13% 10% to French wine still Currently, the 20% plus dominates the United States is a NT$7 red wine market. Taiwan’s second per 1% Knowledge largest wine alcohol about wines is supplier in terms content generally low of value. Despite per liter throughout wine the front-runner distribution position of channels. Wines French wines, from new world U.S. wines countries such as continue to gain Chile and consumer Australia are recognition and getting more acceptance. competitive due to low costs. Source: Taiwan Bureau of Foreign Trade: Taiwan Council of Agriculture SECTION V. POST CONTACT AND FURTHER INFORMATION Contact Information for FAS Offices in Taiwan and in the United States For Trade Policy/Market Access and General Agricultural Issues: Taiwan American Institute In Taiwan, AIT, Taipei Office Hours: 8 :00 AM – 5:00 PM Telephone: ( 011-866-2) 2162-2316 Fax: ( 011-886-2) 2162-2238 Email-FAS: a Pouch - Diplomatic Physical Location Agriculture Section American Institute in Taiwan Departmen t of State (AGR) No. 7, Lane 134, Xinyi Rd., Sec 3 4170 AIT Taipei Place Taipei, 10659 Taiwan Washington, DC 20189-4170 Foreign Service Personnel Locally-Employed Staff Jeffrey Hesse (Chief) Rosemary Kao (Ag Specialist) Chris Frederick (Deputy Chief) Chiou Mey Perng (Ag Specialist) Angela Hu * (Admin Assistant) For Market Promotion Assistance: Taiwan Agricultural Trade Office - Taipei, ATO, Taipei Office Hours: 8:00 AM – 5:00 PM Telephone: (011-886-2) 2162-2000 x2316 Tel-Direct Line: (011-886-2) 2705-6536 Fax: (011-886-2) 2706-4885 Email-FAS: Pouch - Diplomatic Physical Location Agricultural Trade Office ATO / American Institute in Taiwan Department of State (ATO) Suite 704 Lotus Mansion 4170 AIT Taipei Place 7th fl No. 136 Renai Road Sec. 3 Washington DC 20189-4170 Taipei Taiwan Foreign Service Personnel Locally-Employed Staff Hoa V. Huynh(Director) Cleo W. Y. Fu (Ag Mktg Specialist) Amy Hsueh (Ag Mktg Specialist) Katherine Lee (Ag Mktg Specialist) Angelique Su (Admin Assistant) USDA Stakeholders The Agricultural Trade office works with a large number of U.S. industry organizations, several of which are resident or have local representatives in Taiwan. These cooperators share the view that Taiwan is a promising market for agri-food products. USDA Producer Associations - Taiwan Representatives (and PR Firms) LOCA COOPERAT L CONTA PHON ADDRE OR AGEN CT E-mail E FAX SS T California Cherry Advisory Board California Tree Fruit Agreement P 10F-3, ear Bureau Nor Steven 508 th-West R C (8862) (8862) hu & Steven Chung aisin Assoc 2618Admini iat C 272619 27 hu Hsiao E. t strative 39 15 C es Rd., Sec. ommittee W 5, Taipei ashington Apples Food Export Northeast/Mid west Wisconsin Ginseng Board California Table Grape Committee U.S. Dairy Export Counc 7D07, 5 il PR (8862) USA Rice C R (8862) osaline HsinYi onsult C 878989 272521 F hen R ro d., Sec. ederation ant Ltd. 39 55 W 5, Taipei ine Institute of California USA Apple US Potato Board 3F, 14, Northwest lane 26, C 862) herry He 88609) (8rma (n Tai-shun Gr n/a 236276owers Kuo 321234 St. m; Assoc 82 76 iation Taipei Taiwan 12F-1, U. S. Meat 23, Ex Da (8862) (8862) vis; port n/a Wu 273612 273615 Keelung Federation 00 00 Rd., Sec. 2, Taipei Suite7C- 06, Taipei California World Agr (8862) (8862) icultural Irene Trade CAEC- Ex n/a 878988 878988port Tsai Center, C 55 33 ouncil 5, Hsin- Yi Rd., Sec5, Taipei 9F, 88 Chien Oceanspray Da (8862) (8862) isy Kuo N. d.m.hong@oceanspray n/a (beverage) Hong 251840 251846 Rd., .com 05 09 Sec.2, Taipei 9F, 88 Chien Oc (8862) (8862) eanspray Kenneth Kuo N. kenjohn@ms27.hinet.n n/a (ingredient) W 250233 250410ang Rd., et 31 94 Sec.2, Taipei U.S. Highbush Blueberry Council, Mi (8862) PO 31-llie C n/a O alifornia Fig Hsia 230931 90 P 30 31-90 Producers Association 8F., US P Wise (8862) (8862) No.201, etfood C; onsulti Echo L jin 251409 271848 Fu-Shin Institute ng 84 50 N. Rd, Taipei APA - The Charlie (8862) (8862) Taipei charlie.barnes@apawo Eng n/a ineered Barnes 272016 272016 World Wood 24 46 Trade Association Center, Suite 7C-08, #5 Hsin- yi Road Section 5, Taipei 110 6F, 27 (8862) (8862) Chang E. ASA Anthony - IM n/a Tha 256029 256838 R d. ng t 27 69 Sec.1, Taipei 7F, 157, Nanking U.S. Grains C (8862) (8862) lover E. Rd., t; C n/a 250754 250248ouncil Chang Sec.2, usgcclvr@ms41.hinet. 01 51 Taipei, net Taiwan 3/3, lane 27, ChungSh U.S. Wheat R (8862) (8862) onald an N. Assoc n/a 252111 252115iates Lu R d., 44 68 Sec.2, Taipei, Taiwan Taipei World Trade (8862) (8862) State of Erick Center Ala n/a ska, U.S.A Kish 878622 878622 7C-01, 27 21 Taipei 110 Taiwan Other Relevant Reports Reports on the Taiwan food and agricultural market are available on the FAS website. The search engine can be found at: | Taiwan Foodservice — Behind the Scenes_Issue 3 | Food Service - Hotel Restaurant Institutional, Livestock and Products, Promotion Opportunities | Taipei ATO | Taiwan | 4/25/2012 "Taiwan Foodservice—Behind the Scenes" is a publication that focuses on trends in Taiwan's foodservice industry. The newsletter features information related to Taiwan's foodservice sector and interviews with key local players so that you, our readers, can obtain more objective view of the potential market for U.S. food products in Taiwan. Taiwan Foodservice — Behind the Scenes_Issue 3_Taipei ATO_Taiwan_4-20-2012 | Taiwan Baking Industry 2012 | Product Brief | Taipei ATO | Taiwan | 4/3/2012 In 2011, the Taiwan baking sector was valued at an estimated US$900 million based on the market val
Posted: 29 June 2012